Scott Reeder: The back story of Ill. sports subsidies

Mike Madigan and former Gov. Jim Thompson are the men most responsible for creating the modern era of sports subsidies in the Land of Lincoln — and perhaps the nation.

Scott Reeder

Mike Madigan loves the Chicago White Sox.

The Illinois House speaker’s posh Statehouse office walls are adorned with Sox and other sports memorabilia.

And he is a season-ticket holder to some of the finest seats in U.S. Cellular Field.

But more importantly, from a taxpayer perspective, he and former Gov. Jim Thompson are the men most responsible for creating the modern era of sports subsidies in the Land of Lincoln — and perhaps the nation.

In the waning minutes of June 30, 1988, then-Gov. Thompson was literally racing against the clock to pass a $120 million subsidy for the White Sox, who were threatening to move to Florida. The measure needed to pass before midnight, when the legislative session would go into overtime and a supermajority would be needed to pass legislation.

Former state Rep Bill Black, R-Danville, said this type of threat was a new concept in 1988.

“We have seen it happen over and over again across the country since then, but back then it was really unheard of,” he said. “This would not have even come to a vote without Mike Madigan. They said it was being done for economic development — but that area around the ballpark — I still call it — Comiskey Park hasn’t improved. The only thing I can see that has changed is that Chicago has the highest — or second-highest — hotel taxes of any major American city.”

When the White Sox subsidy vote was brought before the House, a majority of lawmakers voted against the proposal. But instead of counting the votes, the presiding officer — a top Madigan lieutenant — left the roll call open as Thompson walked to the desks of each lawmakers voting “no” and persuaded them one by one to change their votes.

The last lawmaker necessary to make a majority switched his vote when the hands on the main clock in the House Chamber were a few minutes past midnight, but the presiding officer, Majority Leader

Jim McPike, said it was a few minutes before midnight on his watch and declared the bill passed.

“The day after this vote took place, I said, ‘They have opened the pasture gate and now the goats, the cows and the pigs are all coming into feed,’” Black said. “And since the White Sox vote, that is exactly what has happened — we have helped the Bears and now we are helping DePaul University’s basketball team — and they are a private school.”

Reportedly, Chicago city officials are in talks with DePaul University to build a basketball stadium at the Metropolitan Pier and Exposition Authority, or MCPier, a municipal corporation created by the Illinois General Assembly. Its mission is to attract trade shows, conventions, meetings, expositions and public events to Chicago.

As much as $125 million in public financing reportedly is being considered for the project.
But the White Sox development agreement, a quarter-century ago, was even larger than what is being discussed for the MCPier stadium.

The Chicago White Sox’s U.S. Cellular Field, which opened in 1991, cost taxpayers $125 million to build and is owned by the Illinois Sports Facilities Authority. Enhancements pushed those costs to more than $200 million, plus interest.

The White Sox paid no rent until 2008.

Three years ago, the Sox began paying $1.5 million per year in rent. Still, compared with the overall operating costs of the team, this is miniscule. In comparison, last year then-White Sox pitcher Jake Peavy was paid $17 million.

Since the club doesn’t own the facility, it pays no property taxes.

Black contends that the Sox deal has led to others:

The United Center, home to the Bulls and the Blackhawks, was privately financed, but the building has a special property tax break that saves the clubs millions in property taxes.
In 2003 the Chicago Bears’ Soldier Field renovation was completed with the assistance of a $387 million Illinois Sports Facilities Authority bond, to be paid back with interest from Chicago hotel and motel taxes.

These types of deals are never good for the taxpayers, said Andrew Moylan, a senior fellow for the R Street Institute, a free market think tank based in Washington, D.C.

“If you look at the number of stadiums that have been built (recently) without subsidies it’s basically none,” he said.

“Anyone who has enough scratch to buy a professional team is someone who has been very successful in life. In most cases they have been successful by providing products and services they want in the free market. But stadium subsidies are so ingrained in the culture of professional sports that it is almost unheard of for a team not to ask for a subsidy — because they believe it will put them at a disadvantage against their peer owners.”

The Ricketts family owns the Chicago Cubs and are also outspoken advocates for the free market.

But in 2010, the Ricketts family proposed to use revenues from anticipated growth in existing amusement taxes that the team pays to Chicago and Cook County to pay off more than $200 million in state-issued bonds to fund the improvements.

That plan went nowhere.

Ricketts family spokesman Dennis Culloton was more diplomatic in his description of dealings with the Chicago City Council.

Ultimately, the assistance from the city included relaxing regulations, such as allowing for larger signs at Wrigley, allowing for pushing back walls in the right and left fields and for other amenities.

“Certainly during the presidential election, tensions were high,” Culloton said. “But at the end of the day Mayor (Rahm) Emanuel lead an effort for significant reinvestment in Wrigley Field and the family is grateful for that.”

Scott Reeder is a veteran statehouse reporter and the journalist in residence at the Illinois Policy Institute. He can be reached at sreeder@illinoispolicy.org. Readers can subscribe to his free political newsletter by going to ilnews.org or follow his work on Twitter @ScottReeder.